New Vehicle Sales Sputter in December

New Vehicle Sales Sputter in December

Despite posting weaker sales in December, automakers sold a record 2.038 million new vehicles in Canada in 2017 as more drivers opted to purchase SUVs and trucks over passenger cars.

Research firm Autodata says 17.2 million vehicles were sold past year.

In 2016, the US auto industry set another record, marking the seventh straight year that auto sales improved year-over-year. Sales totaled 2.587 million units compared with 2.615 million sold in 2016.

"While we had a decline (in December) on a year-over-year basis, the strength during all of 2017 was such that we shattered the previous record, surpassing two million units for the first time ever", said Carlos Gomes, a senior economist and auto industry specialist at Scotiabank. Volkswagen brand sales rose 5 percent.

Ford held onto the top Canadian sales spot in 2017, despite seeing its December sales drop by 11.3 per cent. However, full-year sales were up by 1.3 percent. Consumers like the extra storage space, higher seating position and improved fuel economy of car-based SUVs, also called crossovers.

Automakers had been bracing for the sales gains to come to an end for the last couple of years, but that was averted in 2016 in part by heavy incentives implemented late in the year to unload excess inventory. While that included a 15.2% decline in vehicle sales from 2016, it also included a record year for sales of SUVS at the USA carmaker.

Some automakers did not manage to post annual sales increases, including FCA, Hyundai and smart.

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Honda's USA sales rose 0.2 percent for the year to 1.6 million.

Despite the usual year-end push to get vehicles out the door, most automakers endured tough sledding in December. SUV sales fell 12% year over year in December.

GM's overall December sales - retail and fleet - were down 3.3% and for the year, they fell 1.3% for the year. GM reported a less dramatic monthly drop than analysts expected, as sales of the Chevrolet Silverado climbed 25%.

Ford shares are trading in the green Wednesday, as are GM shares, as both vehicle makers announced upbeat sales in the final month of 2017.

While industrywide sales for the year were down compared to the year ago results, pricing numbers on the vehicles sold were encouraging.

Meanwhile, as the Canadian government continues to look at ways to increase electric-vehicle adoption, GM's electric vehicles account for a small portion of its overall sales.

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